Postage cost rise to be offset by credit scheme

7 September 2005
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08 September 2005 | Helen Gilbert

Large business postal users will be reimbursed for some of the extra costs incurred when changes to mail pricing come into force in September 2006.

Under the new pricing scheme, approved by postal regulator Postcomm last month, smaller but heavier items will become cheaper while larger bulkier letters and packages will become more expensive to send.

The changes are expected to affect prices on around 30 per cent of business mail.

But business users spending £100,000 or more a year and whose postal charges rise by at least 50 per cent under the new pricing structure will be reimbursed 40 per cent of their additional postal charges by Royal Mail in the first year.

They will also recoup 20 per cent of the costs in the second year, with reimbursement taking the form of postal credits.

However, Nicola Rowe, director of circulation at the Periodical Publishers Association described the 50 per cent threshold as "unrealistically high".

She said: "We are disappointed that Postcomm has chosen to wash its hands of the mitigation scheme and to leave the detail to Royal Mail.

"Postal costs can represent up to 40 per cent of total costs for a magazine and for the majority of those titles, reformatting will not be an option. We will be lobbying Royal Mail to do more to help publishers facing unacceptably high increases."

Brendan Cassidy, manager of post and portering at the University of Warwick, which sends out 60 tonnes of franked mail and 30 tonnes of international mail each year, said staff would need to use A5 envelopes instead of A4 to keep costs down.


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